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Travel Inflation Report: March 2025 – A Comprehensive Breakdown
Travel prices have increased by 1% compared to last year, according to the latest data from insurascape Travel Price Index. While this rise is lower than the broader inflation rate of 2.8%, it’s still crucial for travelers to understand how these changes impact their budgets. In this detailed guide, we’ll break down the latest travel costs, compare them to pre-pandemic prices, and share actionable strategies to save on your next trip.
Key Takeaways
- Travel prices are up 1% year-over-year (YoY) as of February 2025.
- Airfares are down 0.7%, while hotel rates have increased by 1.7%.
- Rental car prices have dropped significantly, down 7.1% compared to last year.
- Compared to pre-pandemic levels, travel costs are up 13% since February 2020.
- Smart strategies like using travel rewards cards and booking strategically can help you save.
How Travel Costs Have Changed in 2025
1. Airfare: A Mixed Bag for Travelers
Airfares in February 2025 are down 0.7% compared to the same time last year. Over the past decade, airfares have actually decreased by 9.2%, which is surprising given that overall consumer prices have risen by 35.9% during the same period.
However, travelers often feel like airfares are higher due to unbundling. Airlines now offer lower base fares but charge extra for amenities like checked bags, seat selection, and early boarding. For example, Southwest Airlines recently announced it will end its policy of allowing two free checked bags for flights booked after May 28, 2025. This change could impact overall travel costs in the coming months.
Airfare Price Changes:
| Comparison | Change |
|---|---|
| February 2025 vs. January 2025 (MoM) | Down 1.2% |
| February 2025 vs. February 2024 (YoY) | Down 0.7% |
| February 2025 vs. February 2015 (10 Years) | Down 9.2% |
2. Hotel Rates: A Slight Increase
Hotel and motel room rates have risen by 1.7% compared to last year. While this is lower than the overall inflation rate, it’s still a noticeable increase for travelers. Over the past decade, hotel prices have increased by 24.5%, which is less than the 35.9% rise in overall consumer prices.
Hotel Price Changes:
| Comparison | Change |
|---|---|
| February 2025 vs. January 2025 (MoM) | Up 3.6% |
| February 2025 vs. February 2024 (YoY) | Up 1.7% |
| February 2025 vs. February 2015 (10 Years) | Up 24.5% |
3. Rental Cars: A Welcome Drop
Rental car prices, which skyrocketed during the pandemic, have continued to decline. In February 2025, prices were down 7.1% compared to last year and 0.3% compared to the previous month. Over the past decade, rental car costs have increased by 15.2%, which is still lower than the overall inflation rate.
Rental Car Price Changes:
| Comparison | Change |
|---|---|
| February 2025 vs. January 2025 (MoM) | Down 0.3% |
| February 2025 vs. February 2024 (YoY) | Down 7.1% |
| February 2025 vs. February 2015 (10 Years) | Up 15.2% |
4. Dining Out: A Growing Expense
The cost of eating out continues to rise, with restaurant prices up 3.7% compared to last year. Over the past decade, dining out has become 48.6% more expensive, outpacing the overall inflation rate. This makes dining out one of the fastest-growing travel expenses.
Restaurant Price Changes:
| Comparison | Change |
|---|---|
| February 2025 vs. January 2025 (MoM) | Up 0.4% |
| February 2025 vs. February 2024 (YoY) | Up 3.7% |
| February 2025 vs. February 2015 (10 Years) | Up 48.6% |
5. Entertainment: A Moderate Increase
Tickets for movies, theaters, and concerts have risen by 1.8% compared to last year. Over the past decade, entertainment costs have increased by 38.6%, which is slightly higher than the overall inflation rate.
Entertainment Price Changes:
| Comparison | Change |
|---|---|
| February 2025 vs. January 2025 (MoM) | Up 0.3% |
| February 2025 vs. February 2024 (YoY) | Up 1.8% |
| February 2025 vs. February 2015 (10 Years) | Up 38.6% |
How Travel Costs Compare to Pre-Pandemic Levels
While travel prices are up 1% compared to last year, they’ve increased by 13% since February 2020 (the last month before pandemic lockdowns). This is significantly lower than the 23.4% increase in overall consumer prices during the same period.
The first half of 2024 saw a slight dip in travel prices, thanks to the stabilization of costs after the “revenge travel” boom of 2023. However, prices have since crept up, making it essential for travelers to plan ahead.
Smart Strategies to Save on Travel in 2025
1. Use Travel Rewards Cards
Travel rewards cards can help you save significantly on flights, hotels, and more. Look for cards that offer:
- Welcome Bonuses: Earn points or miles just for signing up.
- Complimentary Perks: Free checked bags, airport lounge access, and trip insurance.
- No Foreign Transaction Fees: Save on international purchases.
Top Travel Rewards Cards for 2025:
- Chase Sapphire Preferred® Card: Great for flexibility and point transfers.
- Wells Fargo Autograph® Card: No annual fee and generous rewards.
- Capital One Venture Rewards Credit Card: Ideal for flat-rate travel rewards.
- Chase Sapphire Reserve®: High-end perks and bonus rewards.
- The Platinum Card® from American Express: Luxury benefits for frequent travelers.
- Ink Business Preferred® Credit Card: Perfect for business travelers.
2. Book Strategically
- Flights: Use fare comparison tools and book during off-peak times.
- Hotels: Consider alternative accommodations like vacation rentals or hostels.
- Rental Cars: Book early and compare prices across multiple platforms.
3. Save on Dining
- Pack Snacks: Bring your own snacks to avoid high airport and restaurant prices.
- Shop Local: Visit grocery stores for affordable meals while traveling.
- Use Lounge Access: Many credit cards offer complimentary lounge access with free food and drinks.
4. Monitor Price Trends
Keep an eye on travel price trends and book when prices are low. For example, airfares tend to be cheaper during the off-season, while hotel rates may drop during weekdays.
Methodology
Insurascape Travel Price Index is based on data from the Bureau of Labor Statistics’ Consumer Price Index (CPI). The index tracks prices for flights, lodging, car rentals, food, and entertainment, weighted by estimated spending in each category. The data reflects February 2025 prices, as reported in March 2025.
Spending Categories and Weights:
- Flights: 36%.
- Car Rentals: 6%.
- Lodging: 30%.
- Food: 21%.
- Entertainment: 7%.
Final Thoughts
While travel prices have risen slightly compared to last year, they remain lower than overall inflation rates. By understanding these trends and using smart strategies like travel rewards cards and strategic booking, you can save significantly on your next trip. Whether you’re planning a weekend getaway or an international adventure, staying informed is the key to making the most of your travel budget.